Ohio's Utica-shale drilling boom hasn't quite met the initial heady expectations, at least according to one measuring stick. Ohio Department of Natural Resources officials told state legislators in March that as many as 250 natural-gas and oil wells would be drilled into the shale by the end of this year.
Ohio’s Utica-shale drilling boom hasn’t quite met the initial heady expectations, at least according to one measuring stick.
Ohio Department of Natural Resources officials told state legislators in March that as many as 250 natural-gas and oil wells would be drilled into the shale by the end of this year.
But state records show that 165 wells have been completed, and 22 are being drilled.
The pace has been slowed by low natural-gas prices and a backlog in the work needed to connect the wells to customers, said Tom Stewart, the vice president of the Ohio Oil and Gas Association.
“That all has a throttle effect on development,” he said. Despite the delays, state officials said shale drilling is alive and well in Ohio.“We’re having new companies that continue to come in, and permitting remains steady,” said Heidi Hetzel-Evans, a Natural Resources Department spokeswoman.
Drilling companies continue to tout their biggest finds.
Gulfport Energy announced last week that tests of its Shugert 1-12H well in Belmont County showed it will produce natural gas at a rate of 28.5 million cubic feet per day, plus 2,907 barrels of natural-gas liquids, which include propane and ethane.
The Shugert well tops last year’s biggest producer, Chesapeake Energy’s Buell Well in Harrison County. Chesapeake reported in September 2011 that the well produced 9.5 million cubic feet of natural gas a day and 1,425 barrels of natural-gas liquids.
It was Natural Resources Director James Zehringer who told a state Senate committee in March that 250 wells would be drilled by the end of this year. A timeline in his written testimony also predicted 750 new shale wells by the end of 2013 and 2,250 wells by the end of 2015.
Hetzel-Evans said the agency based its drilling projections on shale activity in Pennsylvania, where state records show that more than 5,600 shale wells have been drilled since January 2009.
Shale wells in Pennsylvania and other states have produced so much natural gas, propane and ethane that prices have dropped significantly. A thousand cubic feet of natural gas, which sold to refiners and distributors for $4.20 last year, now goes for about $2.90. U.S. Department of Energy statistics also show that a gallon of propane has dropped from $1.45 last year to less than 90 cents.The same goes for another natural-gas liquid, ethane, which now costs more to ship to a Texas refinery than it is worth, Stewart said.
Shell Chemical LP announced in March that it had selected a site in Beaver County, Pa., for a new ethane refinery, but construction hasn’t begun.
Transportation costs are one reason that 114 drilled Utica-shale wells aren’t yet listed in state records as producing. At the same time, smaller pipelines are needed to connect the wells to natural-gas processing plants and then to a national pipeline network.
Gulfport’s Shugert well, according to a company news release, should be connected to a pipeline in January.
“It’s a huge mess of logistics,” Stewart said.Work is under way to build a regional pipeline network. The Public Utilities Commission of Ohio has received 40 pipeline-construction notices since a state law requiring them took effect in September, said Jason Gilham, an agency spokesman.
The drilling that has occurred has had an impact in eastern Ohio, especially in Carroll County, which has more wells — 73 — than anywhere else in Ohio. Paul Feezel, leader of the advocacy group Carroll Concerned Citizens, said it’s hard to imagine how drilling could get busier.
“I live on (Rt.) 332, and I can say without a doubt, on any given day, there are hundreds of additional trucks that pass through,” Feezel said. “It’s a beehive of activity.”